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Funding update

28 Oct 2013 07:30

RNS Number : 4846R
Strategic Natural Resources PLC
28 October 2013
 



Strategic Natural Resources Plc

("SNR" or the "Company")

 

Funding update

 

SNR, the AIM listed natural resources developer operating in South Africa, today announces an update in relation to funding for its 74% owned subsidiary Elitheni Coal (Pty) Limited ("Elitheni").

 

As referenced in previous announcements and in the Report & Accounts of the Company for the financial period ended 30 June 2013, the Company confirms that working capital at Elitheni remains very tight. However, the board of SNR (the "Board") has been informed by the board of Elitheni that it is at an advanced stage of discussions with a number of experienced coal mining parties in South Africa regarding a short term capital injection into Elitheni, by way of debt, which would be potentially convertible into Elitheni shares. Based on the information supplied to them by the board of Elitheni, the Board is highly confident that such discussions will have been concluded successfully by the end of this week. Discussions are also on going regarding a more permanent recapitalisation of the Elitheni business. The entry by Elitheni into such a short term debt facility will be enable Elitheni to satisfy its outstanding and valid current creditors. However, a temporary slowdown of mining operations may be required in any event pending a more permanent capital injection. The Board also understands that both the short and longer term debt facilities currently under discussion will likely be converted into new ordinary shares in Elitheni, resulting in a dilution of the Company's equity interest.

 

Should the discussions regarding a short term injection of capital into Elitheni not prove to be successful and in the absence of alternative financing being secured in the short term, the board of Elitheni will have to review its options, with a view to maximising the value of the Elitheni assets, which may well include, inter alia, a slowing down of operations at the Elitheni mine until such alternative financing becomes available.

 

The Board confirms that SNR continues to operate within the limits of its financing facilities and enjoy the full support of its major shareholders.

 

Gabriel Ruhan, CEO of SNR said "The depressed international coal price has been a real barrier to securing strategic funding in a timely manner but I am encouraged by recent market improvements which are helpful. The Board remains focussed on the strategic value of the mine which represents a very large resource, excellent infrastructure access, the real possibility of a coal fired power station in the Eastern Cape and strong support of both the provincial and national governments of South Africa."

 

Further announcements will be made in due course, most particularly in relation to the financing arrangements of Elitheni.

 

For further information, please contact:

 

Strategic Natural Resources plc

 

Andy Brennan, Chairman

Gabriel Ruhan, CEO

+44 (0)20 3328 5656

 

 

Allenby Capital Limited - Nominated Adviser and Broker

 

Nick Naylor/Mark Connelly/James Reeve

+44 (0) 20 3328 5656

 

 

FTI Consulting

Ben Brewerton/Georgia Mann

+44 (0) 20 7831 3113

 

For further information about Strategic Natural Resources plc please visit www.snrplc.co.uk

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCUBSUROAARUUA
Date   Source Headline
2nd Jul 20087:00 amRNSTrading Update
27th May 20087:00 amRNSElitheni Resource Update
21st May 20087:00 amRNSMining Right EMP completed
19th May 20087:00 amRNSCoal Mining Permit Granted
3rd Mar 200810:05 amRNSHolding(s) in Company
29th Feb 200810:01 amRNSDirector/PDMR Shareholding
20th Feb 20087:00 amRNSHolding(s) in Company
14th Feb 20087:01 amRNSElitheni Resource Update
11th Feb 200811:47 amRNSDirector Dealings
29th Jan 200812:40 pmRNSDirector/PDMR Shareholding
24th Jan 20081:03 pmRNSShare Purchase
8th Jan 20087:00 amRNSBoard Appointment
21st Dec 20077:00 amRNSIncreased Prospecting Rights
20th Dec 20077:01 amRNSSNR sub secures BEE partners
3rd Dec 20077:00 amRNSProspecting Right
29th Nov 20077:02 amRNSIPSA Power Plant Development
26th Nov 20077:00 amRNSInterim Results
23rd Oct 20073:37 pmRNSHolding(s) in Company
10th Oct 20077:00 amRNSInitial Mining Plan Completed
4th Sep 20077:01 amRNSElitheni Resource Update
10th Aug 20072:09 pmRNSHolding(s) in Company
9th Aug 200712:29 pmRNSDirectors Dealings
8th Aug 200712:17 pmRNSDirectors Dealings
7th Aug 20078:26 amRNSAdmission to AIM

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